Selling a Home in California in 2026: How Much Tax, How Much Commission, and How Long It Takes
· Selling
Sellers ask three things: what will I net, how long will it take, and what tax do I owe. Here is the 2026 California answer: capital gains and the 250,000 / 500,000 dollar exclusion, FIRPTA withholding for foreign sellers, California's 3.33 percent withholding, commissions and closing costs, and a realistic timeline.
Tax first, because it is why most people search this question. The US taxes the profit on a sale: the closing price minus what you paid, the costs of buying and selling, and improvements made while you owned it. Held more than a year, the gain is taxed at the federal long-term rate of 0, 15 or 20 percent depending on your total income that year, plus a 3.8 percent net investment income tax for higher earners. California has no separate capital gains rate; the gain is added to state income tax at up to 13.3 percent.
A primary residence gets a large exclusion. If you owned and lived in the home for two of the last five years, a single filer excludes 250,000 dollars of gain and a married couple filing jointly excludes 500,000 dollars. Example: a couple bought their home for 900,000 dollars in 2018 and sells for 1,400,000 in 2026; after roughly 60,000 dollars of buying and selling costs the gain is 440,000, under 500,000, so no federal or California tax is due. This is why some families move back into a rental for two years before selling it.
Rentals get no exclusion, and depreciation claimed while renting is recaptured at up to 25 percent. To move from one investment property to another without paying tax now, a 1031 exchange requires identifying the replacement within 45 days of closing and buying it within 180 days.
Foreign sellers face an extra withholding. When the seller is not a US tax resident, the buyer must withhold 15 percent of the sale price, not the gain, and send it to the IRS under FIRPTA. The rate drops to 10 percent when the price is 1,000,000 dollars or less and the buyer will live there, and to zero at 300,000 or less with an owner-occupant buyer. Withholding is not the final tax: any excess is refunded after you file a US return, and a withholding certificate can be requested before closing. Separately, California withholds 3.33 percent of the price from every seller unless an exemption applies, such as a principal residence or a sale at a loss. All of this comes out of the money you receive on closing day, so build it into your numbers early.
Commissions. In the US the listing commission is negotiated between the seller and the agent; no law sets a percentage. Since August 2024, listing agents can no longer advertise buyer-agent compensation on the MLS and buyers sign their own agreements with their agents; sellers can still choose to cover part of a buyer's costs to attract offers. Our commission is competitive and agreed per property and scope, covering pricing analysis, repair recommendations, professional photography and 3D tours, staging coordination, MLS and full-portal marketing, targeted outreach to Chinese buyer groups and WeChat circles, negotiation and escrow follow-through.
Closing costs beyond commission usually run 1 to 2 percent of the price: escrow fees (customarily split between buyer and seller in Southern California), the owner's title policy, Los Angeles County documentary transfer tax at 1.10 dollars per 1,000, the City of Los Angeles tax at 4.50 per 1,000 plus the ULA tax of 4 to 5.5 percent on sales above roughly 5,000,000 dollars with thresholds adjusted annually, and separate city taxes in places like Culver City and Santa Monica; plus termite inspection, the natural hazard disclosure report, HOA document fees and sometimes a home warranty for the buyer.
How long. Preparation takes one to three weeks: small repairs, cleaning, staging, photography and 3D. On the market, most correctly priced Southern California homes draw offers within a few weeks in 2026, while homes priced above the market sit for two or three months and close after a reduction. Once in escrow, financed buyers take 30 to 45 days and cash buyers 7 to 14. A townhome we sold in Gardena in August 2026 was listed on August 3, went into escrow on August 17 and closed on September 1, 29 days start to finish, at 10,000 dollars over the asking price with no reduction; the case study is on this site.
Selling quickly without leaving money behind is not complicated: price it right, prepare the home, and market it widely. Pricing matters most, since the same home can be valued 100,000 dollars apart, so we put the last six months of comparable sales, current competing listings and real buyer feedback side by side before setting the list price.
Can the proceeds go back to China? The US places no restriction on moving your own sale proceeds abroad; banks report cross-border transfers above 10,000 dollars as required. On the China side, converting into RMB follows the 50,000 dollar annual individual quota and the bank's documentation rules, so confirm the process with your bank before closing.
To find out what your home would sell for and what you would net, text the address to (626) 202-9573 (text preferred) or add us on WeChat. We will prepare a valuation and net proceeds estimate, free of charge, and you decide from there.